Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229421
Authors: 
Maskaeva, Asiya
Msafiri, Mgeni
Year of Publication: 
2021
Series/Report no.: 
WIDER Working Paper No. 2021/20
Abstract: 
This study simulates the macro-micro economic impacts of the employment policy, focusing on hysteresis in youth unemployment in South Africa. Specifically, we apply a dynamic computable general equilibrium model to calibrate the 2015 South African Social Accounting Matrix to estimate, compare, and determine the impact of employment policy on youth unemployment as well as on aggregate economic outcomes. We simulate two scenarios where we reduce the import price of fuel by 20 per cent. Then, the total government savings from the reduced transport subsidy are reallocated to the education sector to support the unemployed youth. The research findings indicate that demand for youth labour increases in the long run, resulting in a decline in the unemployment rate. Moreover, the consumer price index decreased more than nominal income, thereby increasing household purchasing power and, potentially, easing poverty.
Subjects: 
computable general equilibrium model
hysteresis
youth unemployment
employment policy
South Africa
JEL: 
C68
E30
J64
J68
O55
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-954-9
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-sa/3.0/igo/
Document Type: 
Working Paper

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